Welcome everyone to the Limited Brands fourth quarter 2009 earnings conference call. (Operator Instructions) Ms. Amy Preston, Vice President, Investor Relations, you may begin your conference.

Thanks. Good morning everyone, and welcome to the Limited Brands fourth quarter earnings conference call for the period ending Saturday, January 30, 2010. As a matter of formality, I need to remind you that any forward-looking statements we may make today are subject to our safe harbor statement found in our SEC filings. Our fourth quarter earnings release and related financial information including any non-GAAP or adjusted financial reconciliation tables are available on our website, www.limitedbrands.com. This call is being taped and can be replayed by dialing 1-866-News-LTD. You can also listen to an audio replay from our website. Martyn Redgrave, EVP and Chief Administrative Officer; Stuart Burgdoerfer, EVP and Chief Financial Officer; Sharen Turney, CEO of Victoria's Secret and Diane Neil, CEO, Bath & Body Works, are all joining us today. After our prepared comments we will be available to take your questions for as long as time permits. So that we can speak with as many of you as possible, please limit yourself to one question. Thanks and now I will turn the call over to Martyn Redgrave.

Thanks Amy and good morning everyone. I would like to start by saying we are very pleased with our performance in the fourth quarter. The strength of our assortments combined with disciplined inventory and expense management enabled us to significantly reduce our promotional activity. On an adjusted basis our gross margin rate increased 650 basis points in the quarter. Operating income dollars increased 50% and the operating income rate increased by 610 basis points. Our adjusted earnings per share, as I know you have read, increased 49% to $1.01. This strong performance was the result of our intense focus one execution, staying close to our customers and increasing speed and agility. As we enter 2010 we recognize the environment remains uncertain and challenging. Accordingly, as Stuart will explain in more detail in a minute, we will continue to manage inventory, expenses and capital very conservatively. We will also continue to drive the business with an overriding focus on disciplined execution of retail fundamentals. Improving our ability to react with speed and agility to maximize our sales and profit opportunities is a critical priority. In addition, through the last phase of our retail operations platform technology systems implemented last year we will begin to capitalize on the benefits at Victoria’s Secret and further leverage the benefits we are realizing at BBW. Our entire organization is aligned and focused on these key imperatives. While we have made considerable progress we see many more opportunities to improve in many areas. Our number one priority continues to be improving the results of our core U.S. businesses. We improved our full-year operating margins by 200 basis points to 9.9% this year and we remain very focused on achieving our goal of 15%. Before I turn it over to Stuart I would like to provide you…

Thanks Martin and good morning everybody. Turning to our fourth quarter performance our adjusted earnings per share increased 49% to $1.01 per share versus $0.68 last year. Our reported 2009 results was $1.08 per share versus $0.05 last year. Both this and last year’s reported results include significant items as detailed in our press release. I won’t repeat last year’s items but this year’s fourth quarter results include a tax benefit of $23 million or $0.07 per share primarily related to the reorganization of certain foreign subsidiaries. All results discussed on this call exclude these significant items in both years. Our fourth quarter earnings per share of $1.01 significantly exceeded our beginning of the quarter expectations of $0.71 to $0.86 per share. This upside was driven by better comps and merchandise margin results. To take you through the fourth-quarter results in more detail that sales were $3.06 billion versus $2.99 billion last year and comps increased 1%. The gross margin rate increased to 650 basis points to 40.8% primarily driven by significant increases in the merchandise margin right in all of our businesses. Buying and occupancy expenses leveraged as a percentage of sales. SG&A dollars increased by $26.1 million or 5% and the SG&A rate increased by 30 basis points primarily driven by higher compensation payouts this year as last year’s payouts were essentially zero. Total operating income increased $194.8 million or 50% and 610 basis points as a percent of sales to $585.5 million or 19.1% of sales. By segment, the Victoria’s Secret segment increased by $9.76 million or 520 basis points as a percent of sales to $311 million or 17.3% of sales. Bath & Body Works increased by $85.1 million or 820 basis points as a percent of sales to $294.6 million or 29.2% of sales. The…

Thank you Stuart and good morning everyone. I will begin my remarks this morning with a review of fourth quarter performance and then I will address how we are positioned heading into the first quarter. We are pleased with our fourth quarter results and I am particularly encouraged by how we achieved them which was with strong execution of the fundamentals and responding to the customer with speed and agility. As a result, performance was consistently positive throughout the brand. To that point we delivered good results in both channels, bras our best set category and virtually all other categories. Now I will address fourth quarter results for the stores channel. Victoria’s Secret stores fourth quarter comps were flat to last year and total sales were up 1% to $1.2 billion. Our comp results improved steadily throughout the year as we corrected spring assortment issues and focused on execution. Comps improved from negative 11 in the spring to down 4 in the third quarter and flat in the fourth quarter. Our results were driven by strength in our bra assortment and supported by improved results in the panty category. The Miraculous Bra delivered strong results both at launch and throughout the quarter. Combined with continued growth in other push-up styles and [inaudible] bras we drove bra category growth at significantly improved margin rates. This was in part due to improved agility including chasing an additional 400,000 units in the Miraculous Bra which contributed to fourth quarter sales. Panties were also up to last year. Customers responded well to our assortment and we [take] into winter including bright colors and panties that match bras. We presented a more focused and fashion right sleepwear assortment this holiday which exceeded our expectations and delivered significantly higher margin dollars over last year. In Pink…

Thank you Sharen and good morning. At Bath & Body Works we are encouraged by the results of the fourth quarter. We were able to deliver sales and income growth despite operating in a difficult resale environment. We have continued to focus on our three key categories, our Signature Collection Product Line, the antibacterial business and our home fragrance assortment which all continued to deliver improved results versus last year. Signature Collection was driven by the new Twilight Wood fragrance which launched at the end of the third quarter. Twilight Woods exceeded our expectations as it was one of our most successful fragrance launches in the company’s history. The antibac business posted gains over last year driven by growth in both of our soap and hand sanitizer categories. In January we re-spaced our antibac collections including new packaging, new formulas and new form. We are pleased with the performance of the re-staged line which continued on its strong growth trajectory. Our home fragrance sales were up to last year driven by our strong candle performance. Focusing on the three key categories helped us drive positive results in the fourth quarter including delivering a black Friday that was the biggest sales day ever for Bath & Body Works, selling our seasonal collections at full price throughout Christmas, increasing conversions significantly versus last year helping to partially offset traffic declines while customers also spent more per transaction versus last year. With that backdrop let me take you through the financial results for the quarter. Bath & Body Works fourth quarter comps were up 2%. Total sales for the quarter were $1 billion which was up 1% or $10 million versus last year. For the quarter our operating income was $295 million which was up $85 million or 41% to the fourth quarter…

Thanks Diane. That concludes our prepared remarks. At this time we would be happy to take any questions you might have. Again, just as a reminder please try to limit yourself to one question so that we can get to as many people as possible. You can always get back into the queue. Thanks and I will turn it over to the operator.

(Operator Instructions) The first question comes from the line of Kimberly Greenberger - Citigroup Investment Research.

I noticed you are looking at closing some stores this year, it looks like about 76 stores are slated for closure. Could you just remind us I think you have very, very few stores that are not free cash flow positive on a four-wall basis. If you could update us on those performance metrics and what was it that led you to take another look at your fleet with an eye towards those closures?

With respect to store closures there are 2-3 things I would want to comment on. Also in answering your question, one is that after tax cash flow statistics for our fleet actually improved from the last time we updated reflecting the Q4 results. So we are now at 99% of our stores with positive after-tax cash flow so I think your curiosity is why would you then be closing 75 stores. With respect to that, the thing I would really want to convey is that is a very conservative estimate. I think it is likely that number we actually close could be materially less than that in a range of 40-50 actual stores. As you know the fleet has 3,000 stores you are always opening and closing some stores. Again it is a conservative view and reflects the fact that some malls are on a roll and becoming marginal. So again I think the 75 is a very conservative number and the health of our fleet remains very strong with the after-tax cash flow results improving after the strong fourth quarter we had.

Can I follow-up on one thing you mentioned earlier? The renegotiating it sounds like you are talking to your banks right now to loosen up some of the restrictions on cash deployment. What would be your hope in terms of what you might do with that cash if in fact you are able to get those waivers?

Three or four overall points on that general subject. First, we have been managing as we have been talking about the business pretty conservatively. We got to the $900 million plus in free cash flow and $1.8 billion of ending cash. So we are in the middle of discussions with our bankers. We have great bankers. Those discussions are aimed at amending that facility to reduce the limits on restricted payments. Once we get through that process as we periodically do and in consultation with our board we will evaluate what the best use is for excess cash. We have accumulated a lot of cash this year and we will evaluate that in due course in consultation with our board.

The next question comes from the line of Michelle Tan – Goldman Sachs. Michelle Tan – Goldman Sachs : As we look at the sales you are talking to for February they are very strong. It really seems like February should be the toughest month of the quarter just given the snow storms and everything that has happened. What is driving the strength you are seeing in February and why don’t you see that continuing through the first quarter based on your guidance?

In terms of February as we are indicating, we are expecting high single to low double digit results. Then as we think about the quarter we consider 4-5 other things. First is the Q4 comp result is a plus one. As we look back further we have obviously been experiencing negative comp trends for some time with the fourth quarter being the first positive in a long time. The second is February is a small month. It is impacted by Valentine’s Day. We believe the environment continues to be challenging and unpredictable. We are managing the business very conservatively and to be more specific about that inventories at the end of the year were down 9% per foot and that can put some pressure on sales based on that conservative inventory position at the lowest level in five years. With that said we are working very hard to aggressively chase winners. Lastly, we intend to be and Diane and Sharen can comment on this more specifically but we intend to be less promotional in the first quarter than we were a year ago and that is going to put some pressure on the comps as well.

Really our strength in February is really centered on our main three categories. AS you know we relaunched and re-staged our antibac business and that has seen very positive response from our customers. As well as the fact that we re-staged Signature last year and I am concerned about how big that was to anniversary. We actually had two fragrance launches in February this year versus none last year. So that has also been received very favorably from our customers. Then also we have additional fragrance launches in home fragrance as well as a much broader candle fragrance assortment this year in February than we had last year. All three of those are really driving our results.

For Victoria’s Secret as you know we own Valentine’s Day. So this year as we went into Valentine’s Day we had strong assortments. We actually had the ability to tap into color and then react into color for the month of February so that goes into what we are trying to do with speed and agility. We had some right products, very focused and had more depth behind our key items as we went into February. We also had a strong bra launch coming into February as well with the new lace up bra. As we think about going forward into first quarter we have made a commitment to really be regular price. As we all know last year we drove a lot of the business through promotions. So we are being very conservative and continuing to keep the flexibility and stay close to our customers.

The next question comes from the line of Jeff Stein – Soleil Securities. Jeff Stein – Soleil Securities: Back last fall when you held your analyst day you indicated to get to that 15% EBIT margin you needed kind of a low to mid single digit comp over the next several years. If you are guiding to kind of a flat to up slightly this year, I am wondering is there another path possibly to that 15% EBIT margin if in fact comps don’t materialize as you expect?

A couple of thoughts on that. The first is we are not expecting a particularly good environment in 2010 and at some point between now and 2012 hopefully the environment will get a little better so there will be a little color on the comp story for 2010. With that said, in answer to your question there are additional things we can do to improve the operating margin in the business. These all involve tradeoffs and risks. Obviously to the extent we don’t realize the sales growth that is inherent in our plans we will intensify our review of expenses and the trade offs and risks that would run with a more aggressive view of expense reductions. As you know we have taken a lot of expense out of the business. We think we managed expenses well in 2009 and have a good plan for 2010 but to the extent we don’t achieve our sales goals we will look at the other big levers in the P&L to try and get to that result.

The next question comes from the line of Barbara Wyckoff – Jesup & Lamont. Barbara Wyckoff – Jesup & Lamont : I just have a question about the new systems. Sharen could you elaborate on the new systems and specifically what they will do for you in Victoria’s Secret? Diane could you give us some examples of what the systems have done for Bath & Body?

As you know we implemented our new system back in the summer. As we think about really optimizing this system it is that it gives us the capability to really get demand signals quicker to be able to have more concise inventory in the right places at the right times. Obviously it will take us awhile to build out and truly get the total effect of the system. That is something we are working through. We are excited about the opportunity but yet we are just now putting our toe in the water in terms of optimizing.

As far as the benefit for Bath & Body Works I think we saw [audio break] in the fourth quarter. As we look at balance of inventory by store because as you know it is a pull model versus a push model so we respond to what the customer is responding to, our inventories and our in-stock by best aisles are basically pretty even whether it is a top line store or a lower volume store depending on the market. So our balance gift sets and some of our higher seasonal items we typically are taking a lot of mark downs we actually sold through at regular price and had very little going into our Semi Annual sale in January.

The next question comes from the line of John Morris - BMO Capital Markets.

I have a question for Diane and Sharen. You talked a little bit about it in some of your prepared remarks and would like to have you go a little bit deeper and give us a little more color. As you look ahead to spring where do you see the opportunity in the merchandise assortment compared to last year? Sharen you talked about, for example, correcting some mistakes and making some improvements but I am thinking specifically in terms of the merch assortment and categories in addition to your remarks already on inventory.

First of all, as we think about our spring assortment the first thing is last year we had the wrong colors. We did not have the flexibility to react as we implemented the new system and we had to pull all of the inventory forward so we did not have the opportunity to react to the misstep in color. So what is going to be different this spring? First of all we have clean inventory. We have tested the colors and assortments not only in the bra category and the panty category but also in the sleepwear category as well as beauty. Last year we had a lot less flexibility. This year we have open to buy and agility. Last year we were highly promotional. This year we have the confidence in the assortment because we have tested and reacted to that we will be less promotional. We have less distractions in the business as we were launching and instituting a new system as well pulling back expenses. So then when we think about the assortment that we have we know that we have strong bra launches coming forward because we have tested them. The other piece is we have strong bras we launched in the fall season like the Miraculous Bra that we see still has opportunity and more life in the spring season by continuing to innovate on that bra and coming back with a sustained, re-launch program. We have really been focusing in the panty category on items that can color multiply like we did in lacey and taking that into cotton. We had a focus about panties that matched back and we have done a much better job this season to have panties that are exact match set and is easier navigation. Our sleepwear assortment we have tightened up and focused and narrowed that assortment which now we can go back and sell in coordinates and outfits back to the bra and panty categories. So I think as well as with Pink we have continued to see momentum in that business. I think all in all as far as how we are positioning the business for the spring season although internally we have a lot of optimism we are very cautious. We remain very close to the customer in order to test, read and react with agility. If you think about it in terms of the mantra we have is to execute with simplicity, discipline and speed. I think we are seeing that work we really started in the first half of last year pay off for us.

Diane, the opportunity to last year?

Sure. When I look at our business it is really just continuing what is already strong. We have learned a lot this past year by simplifying our focus on our big three categories. As we look forward to the spring season we basically have two big fragrance launches last year and this year we have six. Antibacterial re-stage. Last year we did not do many fragrance launches. We have a significant amount of different collection of fragrance launches in the antibac business this spring as well as some more fashion type opportunities in our hand sanitizer category. In home fragrance we really were getting the whole assortment consistent across the fleet. So this year it is about operating two different fragrance families. Last year it was basically about half so that significantly is up to last year as well as building on innovation in our diffuser category which we really didn’t have last year.

The next question comes from the line of Marni Shapiro – The Retail Tracker. Marni Shapiro – The Retail Tracker: I would love some updates on some of the smaller projects that have been going on and smaller brands around. If you could talk a bit about Henry Bendel. You opened a few stores but I don’t see any for 2010. I don’t see any Pink stand-alones really in the U.S. Is this just a Canadian concept at this point? I was curious what you were doing with C.O. Bigelow. Have you made any decisions about that as well? If you could touch on that and then if you would remind us what the planned number of the travel and tourism stores were for 2010?

I think the update on a number of things I probably can just tick through. In terms of the status of the C.O. Bigelow concept we have reduced the number of stores in the pilot for that concept to three. We are continuing to work on the positioning of that concept. On the Henry Bendel concept we have now ten stores open and we are very encouraged actually by the early results of those ten stores. They had a fabulous holiday and a fabulous result both for the 5th Avenue Store and the concept stores. We consider it to be a very important pilot of a new concept and while we are showing on the new store opening schedule we are not planning to open more stores in 2010 we are very focused on reading that pilot, positioning it for profitability and growth in the future. But we think we have the right number of stores up and running right now to kind of work it. Les is very engaged personally in that concept. What was the other one? Marni Shapiro – The Retail Tracker: Travel and Tourism and also Pink. I was curious if this was strictly going to be a Canadian stand-alone concept now or is there plans to open up Pink stand-alones in the U.S. eventually?

We have ten free-standing Pink stores today in the United States. In fact we are opening up our Soho store which opens up next week which we are very excited about. We continue to learn from these free-standing Pink stores. So we are continuing to mine for opportunities for free-standing Pink as well in the U.S.

On the Canadian front we have four open and we are planning to open another five in 2010. We are continuing to focus on the Pink free-standing store concept in Canada particularly in its positioning as a brand relative to our La Senza brand initiatives. You heard in my remarks we are also opening the four Victoria’s Secret stores this year in Canada. So that will be a continuation of introducing those brands to Canada and also validating our capability to do so in terms of delivering our brands to a foreign country. The last question you had was T&T. As of the end of the year we have seven stores now open. Since the update call we have opened another shop in Mexico City and one in Singapore. Again, those early pilot stores continue to exceed our expectations. We are very optimistic about the sales productivity but we are also very focused on getting the assortment and merchandising right because it is a new concept and it is not something we really have done before. So again we are cautious about expanding it. We did say we were targeting to open another 10-15 stores in 2010.

The next question comes from the line of Lorraine Hutchinson – Bank of America - Merrill Lynch. Lorraine Hutchinson – Bank of America - Merrill Lynch: With Canada such a crucial geography for you going forward I was hoping to get a more detailed update on La Senza and what strategies in the revamp of that brand are working and what is not working. How will you position the new Victoria’s Secret stores versus La Senza in Canada?

As I mentioned in my remarks we are very focused on the La Senza business as one of our core brands now. We have formed a very strong partnership between Les, Martin Waters our Head of International, Joy Nemeroff, the head of the La Senza business in Canada and her team. They have been working diligently on testing and learning about the different brand positioning, assortment positioning, store design and construction options that would allow us to even further strength the position of that brand, create what we call clear blue water of brand positioning between the VS brand and the La Senza brand in Canada as we introduce VS. Really get that brand positioned as another one of our core brands we then could reposition internationally and potentially even bring into the United States.

The next question comes from the line of Howard Tubin – RBC Capital Markets. Howard Tubin – RBC Capital Markets : A question for Sharen, can you talk about the Pink brand in its entirety for a second? Do you see continued opportunities to grow that further?

We do see a lot of opportunity to grow the Pink franchise today. A couple of things, one of the things that Pink has really not been in is the bra business. So that is truly a focus for us as we think about Victoria’s Secret and Pink being best in bras. Lots of opportunity to grow the bra business. AS you know we have a partnership with the colleges in terms of what we call the CLI program and that continues to be a strong differentiator for Pink. I think we continue to look at opportunities within the Pink franchise and continue to see more and more growth coming from Pink as we expanded the bra category and continue to maximize the CLI and then at the core of Pink is the fleece and knits program and we continue to see that apparel business be strong.

The next question comes from the line of Jeff Black – Barclays Capital. Jeff Black – Barclays Capital : We talked about the store strategy for international and in Canada and in the airports. When might we see a licensing phase of this and what does the footprint look like in your mind three years out? Then an add-on for Stuart can you give us some color on how mass might impact the gross margin across the first half given the benefit you saw last year?

In terms of the international strategy as you know we gave a very full update at the update meeting in October and Martin Waters I think presented what we call the six-point agenda and strategy. Just to reiterate because it does impact how we think about the next steps, our core focus in the international front is the La Senza brand and its positioning and growth in Canada and beyond. The new businesses we are introducing to Canada, BBW, Pink and VS in Canada. The pilot test and rollout of this travel and tourism concept and then yes the franchising model, in other words what we discussed in the October meeting was to begin with a franchising model focused on Bath & Body Works. While we are not in a position really to announce anything specific today on that front I will say we have made a lot of progress and we are on track to meet the goal we discussed in the update meeting of announcing something this year.

It doesn’t have a material effect in terms of mix shift in the first half. As we have had the step downs in sales related to the Express Limited stores over the last 12-18 months we have padded it back which we have talked about. But that has essentially leveled off and there is not a significant margin impact.

The next question comes from the line of Janet Kloppenburg – JJK Research. Janet Kloppenburg – JJK Research : On the February comp I know you are talking about being less promotional but I was wondering how the promotional cadence was at each brand during February, higher or lower versus last year? Sharen, I was wondering how you felt about the inventory levels on your best sellers right now; the Miraculous Bra, the lacey panty program, will these be able to carry you through to meet the strong demand going forward let’s say in March and April? Diane if you could talk specifically about when the antibac business began to ramp and from the influence of the swine flu scare and how you will counter that as you go up against what we might call extraordinary comparisons.

We actually were not promotional. Any pricing promotions we did not do in the month of February. We did do a surprise [and the like] in terms of our partners at Godiva with the Godiva candy which was personalized during Valentine’s but if you are talking about any true pricing promotions, red lines or clearance, none of that happened in the month of February. Janet Kloppenburg – JJK Research : What about last year?

We did take some pricing action last year. We anniversaried where we took our t-shirt bra down to $29.50 so there were some promotions we did anniversary from last year. Janet Kloppenburg – JJK Research : So you had a more profitable month as well in terms of margin?

We are looking at improvement in margin in February. That is correct. When you think about some of our key items such as the Miraculous, yes although we did chase the 400,000 units in holiday we did come into February a little light in Miraculous. We are now back in stock in Miraculous and we have really strategically worked with our sourcing and manufacturing partners that we have a constant delivery flow to meet the customer demand. As well in the lacey we are in very good position right now with the lacey and it is something we are continuing to monitor. Really, really focused on how to stay in stock on those top items but if we get down and miss a little bit of business because of how we are flowing we are going to stay cautious about our inventories to maximize it and if we miss a little bit of business that is okay. We would rather miss a little bit than be too long in inventory.

The first question for Bath & Body Works I think was about promotional levels. Basically we are down to last year just based on the fact we have a lot less clearance. Last year we were clearing our old Signature collection which we are up against so we have less clearance than last year. As far as the swine flu when it really hit us and our business really took off specifically it is around our hand sanitizer category was in April. What we have done to offset that is we have fragrance launches happening in March and April in the antibac category and a whole new category of kitchen odor elimination antibac as well as the fact we have a fragrance launch, the Summer Vanilla in Signature in April which we did not have any fragrance launches in Signature last year.

The next question comes from the line of Todd Slater - Lazard Capital Markets.

You made some really good progress on the operating margin front hitting about 10% rate but still well below your past peaks obviously. How heroic do we need the economy to be to hit your 2010 guidance? It doesn’t seem like we need much of a tailwind. I am just curious what your assumptions are in terms of the external environment. It doesn’t also sound like there are any assumptions you are baking in for the huge royalty income opportunity just begging to be monetized for this whole franchise venture. It sounds like you are still not considering anything on that front.

With respect to an assumption about the environment in 2010 it is underlined in our views we are not assuming any significant improvement in the environment. We are assuming an environment that continues along the lines that we are experiencing today and with respect to impact of international in 2010 with respect to franchising or licensing we don’t have any material amounts in the 2010 numbers with respect to that.

The next question comes from the line of Brian Tunick – JPMorgan.

First, if you could help us understand the profitability in the other segment. Bath & Body Works Canada versus mass, where are the operating margins between those two businesses? Second, on Victoria’s Secret direct it sounds like most retailers think that the online or direct business is 800-1,000 basis points better than their store business. It doesn’t sound like Vicky Direct is as high versus the stores. Is there any inherent reason why that can’t be higher?

Let me try and take those questions. With respect to profit range within the other segment the Bath & Body Works Canada business as you would expect is a higher profit range business than the mass business. As you thought about mass and thought about others in that business that you are familiar with our margin structure is similar to that kind of business. There is not a lot of capital in these businesses and thus the operating margin rates are lower. With respect to the Bath & Body Canada business while it is not yet at its ultimate potential in terms of margin rate it would be more analogous to well performing brick and mortar business. With respect to your question about the margin level, operating margin levels in direct versus stores the direct business is more profitable today on a rate basis than the store business but I think your question is why isn’t it even more profitable. That is in part because direct bears marketing expense associated with the catalog that obviously drives revenue for the direct business but also it benefits the overall brand. So that would mean to me the other factor that really consider with respect to relatively profitability of direct to the stores. So to be specific direct bears the full cost of the catalog marketing for the brand.

The next question comes from the line of Dana Telsey – Telsey Advisory Group. Dana Telsey – Telsey Advisory Group: Miraculous has been so successful, what do you see as the drivers of that launch and applying it to others how can what you learn from Miraculous help other launches be more successful? On Bath & Body Works what do you see is the opportunity to drive sales and margins in 2010? Is it more price or product in terms of sales and margins?

One of Victoria’s Secret skill sets is the fact that new launches are a fundamental of what we do. Although Miraculous was very successful and we are very proud of it, it is not our most successful bra launch ever. One of the things we do is every time we launch a bra we actually go out, pull it forward, test it, learn from it, we listen to the customer and we apply all of that around every launch we do. I think that as one of the fundamentals with the new launches also that has to go with that is new merchant flow, attack and react and I think there is a combination of the power on power that drives the sales and profits. But we always can keep getting better and better.

As far as us, it is really all about the product. It is all about newness, innovation, more sophisticated fragrances, testing and reacting and really building the business in a basic retail 101 way versus really about a price objective.

The next question comes from the line of Stacey Pak - SP Research.

Can you comment on transactions in 2010 or maybe the brands should? Do you think you have that figured out? Would you expect transactions to be positive in 2010? Could both brands comment on AUR and cost in 2010? Sort of where you think those will trend. Then Stuart is there anything more to say about expense opportunities going forward?

In terms of how we are thinking about transactions today for the spring season is we really expect the transactions to be flat. As you know last year we were highly promotional. This year we want to do more regular price business and that is our strategy. We look at traffic probably being a little flat to down as well but we expect conversions to be up. We have put a lot in place in terms of a new selling strategy within the stores and the store expectations which you have started to see the results of driving that conversion in holiday. So the combination of the new selling models and the store execution plus the new assortment and the launches we do believe we will see conversion up. I think from an AUR perspective we will probably see the AUR slightly up and costs are pretty much flat to last year.

As far as Bath & Body Works transactions for us are probably going to be flat to slightly positive as well. Also we look at our AURs to be flat. AUC is basically flat to slightly down.

Three or four things on expenses. The first is we hit our goals in 2009 so we have set some pretty aggressive goals in 2009 and we hit them. The second thing I would reiterate and it is not new perspective is just a continuation and reinforcement of it was just that we were absolutely committed to expenses growing slower than sales and to leveraging those expenses is an important component of the path to 15%. We at the management team are very committed to that. Lastly, as you can see when we continue to pursue top line and expense management in 2010 nothing major to describe other than ongoing discipline there as an overall point. Then implicit in some earlier Q&A if we don’t get the sales growth we are all working very hard to do and we are very confident based on the power of these brands we can realize, we will reevaluate the opportunity for more significant expense actions that may be possible recognizing those for their own tradeoffs and risks.

The next question comes from the line of Roxanne Meyer – UBS. Roxanne Meyer – UBS: I am wondering what incremental investments you may be making in the business in 2010 or possibly just what other assumptions you have built in that keep you from thinking you are not going to leverage SG&A at all even slightly on a flat to positive comp this year?

We are modeling within our guidance slight leverage on the low single digit comp. There aren’t specific significant investments that are implicit in the numbers that we think requires a description or comment. There is a little bit of inflation in the business. We didn’t have a merit increase, for example, in 2009 and at this point we are planning on one in 2010 for our associates. But there is nothing major to describe.

The next question comes from the line of Tom Filandro - Susquehanna International Group.

My question is more for Sharen but Diane as well, as you continue to see strong full price selling and moving to speed to market initiatives and continue on the lean inventory task have you considered any adjustments to the Semi Annual sales events? Will you have to produce products for those events? Any comment on that would be great.

We are constantly looking at the Semi Annual Sale. Every year, we actually took a few days off this Semi Annual sale in January. As we continue to look at the inventory the only thing that would keep us having any level higher than last year is that if we are exiting the big bra programs. We are going to stick with the strategy we started in the fall season about keeping red lines off the floor. Therefore we are going to keep clean inventories on the floor so we will still continue to be either flat or down even though we are not going to be selling red line during the season.

At Bath & Body Works the Semi Annual sale was down pretty significantly in January. We are also planning significantly fewer days in June just based on how we have planned our business. But we typically buy into our Semi Annual sale anyways. We have our fragrances that we carry year around on line that we buy back into for Semi Annual sales as well as our hair products we don’t carry in our stores year around and kind of offer as a service for our customers.

That concludes our call this morning. I would like to thank everybody for joining us and thank you for your continued interest in Limited Brands.

This does conclude today’s conference call. You may now disconnect.